BRICs are the driving forces of dairy powder market

June 18, 2012 by Etienne SMITH

 

world trade dairy productsWorld trade of dried dairy products

 CNIEL logo

06/18/2012, Saint Malo. The international Symposium on Spray Dried Dairy Products opened with a relevant analysis of the last economic data in the dairy powder industry. This topic is quite relevant, when the world trade* of dried dairy products accounts for more than 50% of total dairy trade (in 2009: 14, 1 billion USD on a total of 27 billion USD). 

Over the last 15 years, all dried dairy products trade have strongly evolved. In terms of volume, the strongest growth was for whole milk powder (+1, 1 bt). As for percentage, 3 products were confronted to a booming demand: lactose (+600%), whey (+300%), infant formula (+200%).

 

This opening presentation, made by Mr B. Rouyer (The CNIEL is the national organisation for the whole French dairy industry) outlined the main contributors to world trade of dried dairy products in terms of exports, imports, and industrial investments.

 

Abstract:

“The trade of dried dairy products has been growing fast for the last fifteen years. During this period world trade doubled in terms of volume for whole milk powder and infant formula, tripled for whey powder and is currently five-fold bigger for lactose.

This exceptional growth is a direct consequence of the economic boom occurring in emerging countries, especially in Asia, which stimulated dairy consumption and therefore imports of dried dairy products. China is a noticeable example of these commercial changes. Chinese imports of dried dairy products are close to one million tons in 2011.

The main countries exporting dairy products on the world market have adapted their production to the growing demand in emerging countries. Dried dairy products have clearly been the key axis of development in New Zealand’s milk sector for the last twenty years. They are also passing chesses as the top priority in terms of products for the European processors involved on the world market.” **

 

Main points of the presentation

Asia is the main importer ...

 

The market is driven by the strong demand of BRIC countries, their imports of milk powders were multiplied by 4 between 2008 and 2010. 

The main importer was Asia, which accounts for 63% of the world trade. Africa and South America represent 30 % of global imports, and North America and the EU only 5%.

Concerning infant formula, 52% of the volumes were imported in Asia (+150% 2003-2010), 18% in South America, 14% in Africa.

 

 

BRIC imports dairy food

BRIC imports of dairy products **

     

Main exporters of dried dairy products (compared to world trade in 2011)

Countries trade balance for dairy products **

In 2011, the main exporters of dried dairy products were the European Union (n°1 in IF, SMP & WP), the United States (n°1 in lactose) and New Zealand (n°1 in WMP, NZ IF was considered as underestimated). **

 

... while Europe is the first place of industrial development

 

industrial infant formula packaging lineInvestments announced or realized in 2011 and early 2012 were estimated to be over 3 billion USD, led by 46 different worldwide companies. This estimation is supposed to represent only “the top of the iceberg”.

Surprisingly the main investments were not made in countries that show growing demand. Europe is, by far, the first place of industrial development (1, 5 billion USD). This can be explained by a local growing market along with an increasing demand for European products in Asia, due to several Chinese food safety scandals. European products benefit from the quality management and food safety reputation of occidental companies.

Asia is ranked second, with 700 million USD investments clearly explained by a strong local demand.

American investments (650 million USD) are clearly driven by Latin American countries. Oceania is well positioned with around 400 million USD investments. South America and Oceania, are big milk producers and want to take advantage of the increasing world demand for dairy products.

 


 

* EU intra-trade excluded

** B. ROUYER, 2012. World trade of dried dairy products. Symposium on spray dried dairy products, 18-21/06/2012.